Media Contacts

Industry coverage

Industry coverage

LMAX Exchange calls for UK to lead global regulatory change in the $5.3 trillion FX industry

London, 11 July 2016 – LMAX Exchange, the leading Multilateral Trading Facility (MTF) for FX and one of the UK’s fastest growing fintech companies, is calling for UK financial regulators to show worldwide leadership and deliver on the FEMR objectives to improve transparency in the FX market, set out by the Chancellor of the Exchequer and the Governor of the Bank of England in June 2014.

This call to action comes at a time when the market sentiment still suggests a lack of trust in FX trading, the world’s largest asset class, and at a crucial juncture for the UK government’s aim to protect UK’s leading position in the global financial markets.

LMAX Exchange believes that there is more urgency than ever for the UK regulators to lead with impactful reforms to improve transparency and fairness in the global FX market and put an end to the two-year regulatory inertia. This is supported by the industry survey findings, detailed in the newly launched report by LMAX Exchange.

As a result, LMAX Exchange is calling on the FCA, the Bank of England and HM Treasury to use the FEMR process and to drive the global FX regulatory agenda through introduction of new industry standards and a commitment to a clear timeline for ridding the market of practices open to abuse.

This mirrors the earlier set out objectives by the Fair and Effective Markets Review to “reinforce the confidence in the wholesale Fixed Income, Currency and Commodities (FICC) markets in the wake of serious misconduct seen in recent years; and to influence the international debate on trading practices.”

FX market’s disillusion with regulatory initiatives over the last two years:

65% of the respondents don’t believe they get fair execution when trading FX

Over 60% doubt the impact of the global code of conduct, expecting potential conflict with local regulations

A majority believed that transparency had not improved since the FEMR review

Clear signal that ‘Last Look’ must go:

Findings highlighted the extent to which the use of ‘Last Look’ is open to abuse – 50% of respondents said that they were not aware of this practice

76% of aware respondents preferred to trade without ‘Last look’

62% of aware respondents said ‘last look’ is the most unacceptable market practice

Industry’s view on what can improve transparency:

78% believed that ‘Last Look’ should be abolished

77% said that FX should move to rules-based regulated trading environment

71% of respondents believed that FX trading should move to execution-only venues

These findings show that the ongoing campaign by LMAX Exchange to rid the market of practices that damage trust, like ‘Last Look’, is as relevant as ever. The Global Code of Conduct has been welcomed but market sentiment, demonstrated through the survey, suggests that the global FX industry is not convinced of its potential impact.

As a result of the survey, LMAX Exchange calls on the regulators to:

Define how a transparent and fair FX trading environment should work by being specific about the required business model, trading rules and market practices

Commit to a clear action plan for change with a timeline that includes the abolition of market practices open to abuse

Appoint and empower the delivery body (regulatory, industry or a mix of both) to implement the transparent state of the FX market within a specified timeframe

David Mercer, CEO of LMAX Exchange, comments, “It is clear that restoring trust is the biggest challenge that the global FX industry faces. Fines for market abuse have continued since we last provided an in-depth survey of the market and the Global Code of Conduct has been launched to a lukewarm reception and only addresses the ‘voice market’, just 30% of the industry. The easy questions have been answered, with the hard ones yet to come.

As a result, we are calling on the UK regulators to show global leadership in current uncertain times and abolish ‘Last Look’ among other practices that are open to abuse. This requires a clear timeline and action plan, significant revision to the composition of the working groups and a total focus on the ways that technology can make the global FX industry work more effectively.

These findings should concern those seeking to reform the FX market. FX can only thrive as a liquid, global and essential market that it should be if it engenders trust among all market participants.

This research shows that the market still has a long way to go to win back trust and there needs to be greater focus and urgency to address the major issues at play. This is being brought under even sharper focus with the exceptional global uncertainty following the UK’s Leave vote in the EU Referendum.”

Media Contacts

About LMAX Exchange

LMAX Exchange Group is a dynamic, visionary and award-winning financial technology company. Recognised as one of the UK’s fastest growing technology firms, LMAX Exchange is leading the transformation of the global FX industry to transparent, fair, precise and consistent execution. Operating one global marketplace for trading FX, metals, indices and commodities, LMAX Exchange delivers open access, transparency and a level playing field to all market participants.

LMAX Exchange has been awarded The Profit & Loss Readers’ Choice Awards “Best Margin Sector Platform” for five consecutive years. These awards are voted on by the readers and recognise excellence within the foreign exchange industry throughout the previous year. close

The Deloitte EMEA Technology Fast 500 pre-eminent technology awards program is a ranking of Europe, the Middle East, and Africa's fastest-growing technology companies based on percentage revenue growth over three years. close

2015, 2014, 2013 Fastest Growing Tech Company in the UK – The Sunday Times Tech Track 100 more

LMAX Exchange has been recognised amongst the UK’s fastest growing technology firms for three consecutive years. Tech Track 100, compiled by Fast Track annually and published by the Sunday Times each September, lists Britain’s 100 fastest-growing private tech companies based on sales growth over the last three years. close

2015 Recognised as a Tech City Future Fifty company – Tech City UK Future Fiftymore

LMAX Exchange is part of the Future Fifty programme, focused on accelerating the success of high-growth tech businesses. close

LMAX Exchange Group is the holding company of LMAX Limited and LMAX Broker Limited.

LMAX Exchange is a trading name of LMAX Limited, which operates a multilateral trading facility, authorised and regulated by the Financial Conduct Authority (firm reference number 509778) and is a company registered in England and Wales (number 6505809).

LMAX Global is a trading name of LMAX Broker Limited which is authorised and regulated by the Financial Conduct Authority (firm reference number 783200) and is a company registered in England and Wales (number 10819525).

LMAX Exchange Group is the holding company of LMAX Limited and LMAX Broker Limited | LMAX Exchange is a trading name of LMAX Limited, which operates a multilateral trading facility, authorised and regulated by the Financial Conduct Authority (firm reference number 509778) and is a company registered in England and Wales (number 6505809) | LMAX Global is a trading name of LMAX Broker Limited which is authorised and regulated by the Financial Conduct Authority (firm reference number 783200) and is a company registered in England and Wales (number 10819525) | Our registered address is Yellow Building, 1A Nicholas Road, London W11 4AN.

This website uses cookies. By continuing to browse the site you are agreeing to our use of cookies. For more information read our Cookie PolicyAccept